• Pyaterochka was the main driver of growth in Q4 2016: net retail sales rose by 31.2% y-o-y, driven by 7.5% growth in like-for-like (LFL) sales and a 23.7% contribution to sales growth from a 37.4% increase in selling space.

• In Q4 2016, the Company demonstrated positive LFL traffic for all three major formats.

• LFL traffic of Perekrestok was positive for four quarters in a row and was the highest among all formats of X5 in each month of the fourth quarter.

• LFL traffic of Karusel was positive for the first time since Q4 2015.

The trends that have dominated the Russian food retail market since 2014 continued to affect the sector and X5 in 2016, with some possible signs of stabilisation through a deceleration in the pace of food inflation. It is still too early to speak of a full-fledged recovery being underway, however, and we maintain our sharp focus on efficiency and continuously adapting value propositions to best address Russian consumers' needs, as we have been doing successfully since 2013 when X5’s strategic transformation was launched.

We are delighted that X5 Retail Group has delivered another year of strong results across numerous key performance indicators, including best-in-sector top-line growth and like-for-like performance. X5 set another record in 2016, with nearly one million sq. m. of new selling space added, predominantly through organic growth. We feel that we have the team, the systems and the resources in place to deliver on our strategic goals.

After delivering yet another record year in 2016, we will continue to pursue X5’s strategic targets of profitable, sustainable growth, moving towards 15% market share by the end of 2020 as the leading player in the Russian market.

(1) Numbers in this press release are preliminary and have not been reviewed or audited by the Company’s auditor.

X5 Retail Group

X5 Retail Group is the leading food retailer in Russia. X5 shares are listed on London Stock Echange (LSE) in the form of Global Depositary Receipts. The Company operates several retail formats, including the chain of conveniently located proximity stores under the Pyaterochka brand, the supermarket chain under the Perekrestok brand, the hypermarket chain under the Karusel brand and Express convenience stores.

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